U.S. Stocks Plummet On First Trading Day Of 2021

American stocks are on the ropes to open 2021, led by big losses in the indices. At the halfway point of the Wall Street session, the DJIA DOW (-641), S&P 500 SPX (-80), and NASDAQ (-288) are all deep into the red. Thus far, the sentiment is overwhelmingly negative as traders consider the possibility of Congress challenging the Electoral College later this week.

Aside from last November’s Election Day, this week has the potential to be one of the most politically-charged in recent history. On Tuesday, the Georgia runoffs are scheduled to take place, with the balance of power in the Senate at stake. Wednesday, last month’s Electoral vote is expected to become official, making Democratic challenger Joe Biden the next POTUS. However, there is a growing movement in Congress designed to challenge the Electoral College’s vote. Subsequently, here’s where things stand on both fronts:

• Current odds have the Georgia Senate races between Warnock/Loeffler and Ossoff/Perdue in near toss-up territory.
• Major rallies are scheduled in Washington D.C. to protest the November election. President Trump is scheduled to speak in front of the White House during the 6 January rally.
• At this hour, more than 100 Republican members of Congress plan to object to the certification of the Electoral College on Wednesday. Among these numbers, 12 Senators are standing in support of the movement.

As a general rule, markets hate uncertainty. Given this week’s political docket, it looks like investors are bailing out of stocks ahead of any surprise chaos.

Stocks Plummet, EUR/USD Forms Daily Triple Top

One of the beneficiaries of today’s plunge in American stocks has been the Greenback. In fact, since an early-session rally, the EUR/USD has fallen more than 50 pips from just north of 1.2300.

Here are the key levels to watch in this market as the week unfolds:

• Resistance(1): Triple Top, 1.2308-9
• Support(1): Daily SMA, 1.2218
• Macro Support(1): 38% Current Wave, 1.2092

Bottom Line: In the event that stocks enter correction this week, a buying opportunity may come into play from EUR/USD’s macro-wave 38% Fibonacci Retracement (1.2092). For the rest of the week, I’ll have buy orders in the queue from 1.2106. With an initial stop loss at 1.2074, this trade produces 64 pips on a 1:2 risk vs reward management plan.